AT&T and Time Warner on Saturday announced they had reached a merger deal, setting off alarm bells across the industry. AT&T has agreed to buy Time Warner for US$85.4 billion. At least a year's worth of regulatory scrutiny, public hearings and political maneuvering is expected.
The deal, which followed days of speculation and tightly held negotiations, essentially would create the industry's first vertically integrated mobile provider of premium cable.
AT&T, already the world's largest pay television provider and one of the biggest telecom providers in the world, would gain control over one of the world's top content companies, with properties including cable network HBO and news network in CNN.
The deal combines Time Warner's content with more than 100 million customers who subscribe to AT&T's TV, mobile and broadband services, he said.
"The future of video is mobile, and the future of mobile is video," Stephenson remarked. "There will always be big screen TVs in our homes, but mobile video is what our customers are demanding."
The merged company would be able to innovate on new business models -- for example, combining advertising with subscriptions, the companies said.
Critics of the deal, concerned about the impact it would have on the competitive landscape, were lined up even before the deal became official.
AT&T might make it more expensive for DirecTV competitors to gain access to Time Warner programming, or make it more difficult for Time Warner competitors to get their programming content on the subscription service at DirecTV, warned John Bergmeyer, senior counsel at Public Knowledge.
One key differentiator between this deal and the Comcast acquisition of NBC Universal is that AT&T would function not only as a distributor through Direct TV, but also as a mobile company that owns a network of mobile customers.
This deal will accelerate the development of 5G mobile networks, which will be in greater demand as premium content moves towards mobile distribution, AT&T's Stephenson said.
Courtesy of ECommerceTimes
